The seemingly straightforward process of colleges notifying individuals about the amount of student aid they are eligible for, as well as the costs of attending the college, has suddenly generated heated attention. AACC is involved in addressing this situation to ensure that students are well-served.
There have been longstanding concerns about the alleged complexity, and downright misrepresentations, contained in institutional “award letters.” The basic allegation is that many colleges are, at best, not making it as easy as they should be to help students and families understand what they will actually have to pay to attend a given college once student aid is taken into account. At worst, colleges have been accused of deliberately distorting an institution’s real costs to encourage enrollment. Complicating the situation is the reality that the terms and conditions of student aid programs can be complicated, and that the expenses that a given student may incur as they progress through a program often cannot be precisely determined months if not years before they have completed their studies.
Be that as it may, a recent report, Financial Aid Offers: Action Needed to Improve Information on College Costs and Student Aid | U.S. GAO, from the Government Accountability Office (GAO), excoriated institutions of higher education for their practice. The report stated that “Most colleges are not following best practices for providing clear and standard information in their financial aid offers.” It found that “nearly two-thirds of colleges follow half or fewer of the 10 best practices” in this area. None followed all 10. GAO found that an estimated 91 percent of colleges do not include or understate the net price of attending college in their aid offers, which is generally acknowledged to be necessary to determine the impact of college on a student or their family’s pocketbook. This in turn makes it “difficult for students and parents to compare offers and college affordability…the lack of financial aid offer requirements could lead other students to make uninformed and costly decisions, such as enrolling in an unaffordable college.” The GAO recommended that Congress consider taking action in this area.
The GAO’s report was quickly followed by the introduction of the College Cost Transparency and Student Protection Act, H.R. 9429, H.R.9429 – 117th Congress (2021-2022): College Cost Transparency and Student Protection Act | Congress.gov | Library of Congress, by Representatives Virginia Foxx (R-NC), and Lisa McClain (R-MI). Their statement accompanying the bill said that the institutional behavior was “egregious and unacceptable,” and that “Schools should strive to provide students with accurate and transparent information about college costs instead of hiding behind opaque language and misleading practices.” Among other things, the legislation would require that certain standardized terms, definitions, and formatting concerning student aid offers must be followed. A prospective student’s direct and indirect costs would have to be presented separately. Foxx will likely be in a position to advance this legislation early next year, as likely chair of the House Education and the Workforce Committee.
Earlier this month, AACC joined with the National Association of Student Financial Aid Administrators, the National Association of College Admissions Counselors, the American Council on Education, and seven other higher education associations to create a task force, the National Organizations Collaborate to Improve Student Aid Offers & Transparency on the Cost of College (nasfaa.org), dedicated to creating a set of principles and standards about what information should be included in student financial aid offer letters. It has the stated goal of developing a model that is “clear, meets high standard of transparency, and contains consumer friendly information, while still allowing for institutional customization.” AACC President and CEO Dr. Walter G. Bumphus is serving on the Task Force.
Community colleges are not generally associated with the sharp-elbowed competition for students that is partially responsible for misleading award letters, but they have a great deal at stake in current discussions about award letter practices. First, any potential federal mandate would impact them. More importantly, it is no simple matter to determine what is the right amount and type of information to transmit to prospective or enrolled students about the various financial aid program. And, of course, many impacted individuals lack financial savvy and cannot reliably predict their future financial situations, especially when it comes to the advisability of taking out student loans.
Also, the “living expenses” of students, which student aid programs generally pay for and therefore must be included in student aid offer letters, vary enormously from student to student. Institutions are generally required to calculate an average “cost of attendance,” but that average figure masks a myriad of variation. Being cognizant of this reality is critically important for the community college sector as it endeavors to serve students who often are in very different family and working configurations.
Further action in this area will be occurring. Please direct any questions or comments that you may have in this area to AACC’s Office of Government Relations.
